Borrowing Power Calculator – Formula, Free Online Tools, Mobile Apps & FAQs for South Africans
What Is a Borrowing Power Calculator?
A borrowing power calculator is a financial tool that helps individuals determine how much money they can borrow from a financial institution, such as a bank or lender. In South Africa, this calculator is particularly useful when looking to apply for a home loan, personal loan, or any other type of credit.
How to Calculate Borrowing Power Manually
The formula to calculate borrowing power involves taking into account factors such as income, expenses, and existing debts. The basic formula is:
Borrowing Power = (Income – Expenses – Existing Debts) x Lending Criteria
For example:
If your monthly income is R30,000, your expenses are R15,000, and your existing debts total R5,000, and the lender’s lending criteria allows for a maximum borrowing power of 5 times your income, then your borrowing power would be:
(R30,000 – R15,000 – R5,000) x 5 = R50,000
Best Free Online Borrowing Power Tools in South Africa
- Calculator 1
- Calculator 2
- Calculator 3
When Should You Use a Borrowing Power Calculator?
You should use a borrowing power calculator in South Africa when you are planning to apply for a loan, mortgage, or credit card. It can also be helpful when assessing your financial situation during tax season, creating a budget, or planning for a major purchase.
Where to Learn More About Borrowing Power
For more information about borrowing power and how it can impact your financial decisions in South Africa, consider consulting with a financial advisor or visiting reputable financial websites.
Financial Institutions That Offer Related Calculators
- Bank 1
- Bank 2
- Bank 3
Frequently Asked Questions About Borrowing Power
- What is borrowing power?
- How is borrowing power calculated?
- Is borrowing power the same as credit score?
- Can I improve my borrowing power?
- What factors can affect my borrowing power?
- How often should I reassess my borrowing power?
- Why is it important to know my borrowing power?
Conclusion: Make Smarter Decisions with a Borrowing Power Calculator
Knowing your borrowing power can help you make informed financial decisions in South Africa. Whether you are looking to buy a house, start a business, or consolidate debt, using a borrowing power calculator can provide valuable insights into your financial capabilities. Consider using one of the free online tools mentioned above or bookmark this page for future reference.